Property Acquisition in Cyprus:

Individuals of a foreign nationality are given permission to acquire one of the following:
- One Apartment or
- One House or
- A building plot or land up to three donums (4,014 sq.m)
- Offshore entities may also acquire premises for their business (no limit on the extent) or for the residence of their foreign employees provided the residence is registered on the employees' names.
All properties in Cyprus are Freehold.
After signing a contract of sale, non-Cypriots must apply to the Council of ministers for the permission to acquire property on the island. This procedure is just a required formality and can be easily handled by our associated law firm or any other solicitor of your choice.

Acquiring Title Deeds
The title deeds are transferred to the buyer's name as soon as they are issued by the Land Registry Department and following the settlement of the agreed selling price. Until the title deeds are issued , Tremetoushiotis Developers Ltd , can provide a bank guarantee as security towards the purchase. In this case the buyer bears the relevant cost.

Purchaser’s Safeguards
The legal system in Cyprus is largely based on the British equivalent and safeguards the purchaser's right in many ways. Above all, for the purchaser's protection, the Land Registry in Cyprus provides a simple and effective legal instrument called the "Specific Performance". Once the contract of sale is signed and a deposit paid, the contract is registered at the land registry office. This procedure protects the purchaser's ownership rights until the title deeds are issued and transferred to his name. The contract in the hands of the Land Registry cannot be withdrawn by anyone, and therefore the property cannot be leased, sold, transferred or mortgaged. The purchaser himself can only alter this status.

Looking Ahead - Property Resale
Due to the fact that Cyprus is an attractive holiday destination and secure investment option, property can easily be resold. If necessary, our clients can request the assistance of our company for the resale of their property. Through the company's offices in Pafos and network of associates in Cyprus and overseas associate offices, we can help you sell your property at current market prices. After concluding the sale, the original purchase amount as well as any profits can be repatriated without restriction.



Owning Property in Cyprus and Relevant Costs:

Transfer Fees
Property transfer fees are payable once only to the Land Registry office. The amount is based on a sliding scale as shown below. Purchaser pays when the title deeds are transferred to his name.

The fees are charged on the property's market value at the date of purchase.
Property Value CyP Transfer Fee (% on property value)
Up to 50,000...........3
50,001 - 100,000....5
Over 100,000..........8

Tax & Duties:
Immovable Property Tax.
The registered owner is liable for this annual tax which is based on the value of his property as at 1 January 1980. Property valued at up to CYí100.000 and belonging to individuals is exempt from property tax. For property exceeding that value the rates are:

Market Value CyP Annual Tax CyP per '000
Up to 100,000...............0 %
100,001 - 250,000........0.25%
250,001 - 500,000........0.35%
Over 500,000................0.40%
Stamp duty
Of CyP1.5 per thousand is levied on purchase contracts with a value up to CyP100.000. For any amounts in excess, the rate is CyP2,0 per thousand. This duty is due within 30 days of signing the contract. This single payment is payable by the purchaser upon presentation of the purchase contract to the tax authorities for authentication and validation of the contract as an official document acknowledged by the government authorities.
Capital Gains Tax
Is levied at the rate of 20% on profit arising from the sale of immovable property.
As a general rule, the profit is the difference between the sales proceeds and the purchase price of the property.
Allowances: Generous exemptions are provided for, i.e. net Capital gains up to CyP50.000 earned from the disposal of a family residence are tax exempt.
Estate duty
Was abolished as from 1/1/ 2000.
VAT
As of July 2002 value added tax was revised at a flat rate of 13% on goods and services. Real Estate is excluded from VAT, as are most food items, medicine and other essentials.

Local Authority Tax
Property taxes levied by the local authorities are in the range of CyP30-100 per annum, depending on the size of the property. The tax covers the cost of garbage disposal, street lighting, etc.
Common Expenses
These are payable over fixed periods throughout the year. They vary from development to development and depend on the area of the property. They cover an owner's share towards the cost of cleaning and maintaining common areas and gardens, swimming pool expenses, management fees, collection and repairs. They are estimated to be in the region of CyP250 - 350 per year.

Electricity & Water
Both services are payable to the appropriate authorities over fixed periods throughout the year. They are based strictly on the consumption of each unit. While the cost for every unit will vary, a rough guide could be approximately CyP250 per unit per year .



Options of Finance:
The Central Bank of Cyprus requires that acquired property must be paid for with external funds. Bank transfers and personal cheques are accepted.

As a company, we are happy to discuss the individual needs for each prospective buyer, with regards to methods of payment. Demonstrating maximum flexibility, Tremetoushiotis Developers Ltd can propose a method of payment that matches your circumstances.
Tremetoushiotis Developers Ltd can arrange foreign currency loans for non-Cypriot citizens. Loan Conditions vary slightly from one bank to another, but generally, a loan for about 70% of the property's value is granted, with a maximum repayment period of 10 years.

Environment for Business:
The island's geographical location, the legal system, which is based on the British one, the high quality of life in combination with the low cost of living, the excellent infrastructure in combination with the tax incentives create an ideal business environment. Some of the tax incentives and exemptions offered by the Government of Cyprus are:
- Pensions from abroad are subject to a flat tax rate of 5%. The initial amount of CyP2000 is tax exempt.
- Similarly, the first CyP2000 of investment income remitted to Cyprus by foreign residents or Cypriot nationals residing abroad are tax free, and the remainder subject to a flat rate of 5%.
- Interest earned on foreign capital imported into Cyprus is tax exempt.
- Double taxation treaties concluded with several countries of the world eliminate double taxation of foreigners residing in Cyprus. Where relief is not given under a double taxation treaty, relief from Cyprus tax is given unilaterally.
- The importation of personal effects, household goods and cars is duty free.



Work Permits
The Competent Authority for the issue of Temporary Employment Permits to aliens is the Migration Officer.
The foreign national seeking employment must secure, while being abroad, through personal efforts, a local employer who should submit an application to the Migration Officer on his behalf.
A work permit is granted only on a temporary basis and for a specified position, provided that no suitably qualified Cypriot citizens are available and that the Public Interest of Cyprus is not negatively affected.
These regulations concerning European Citizens will be lifted in time, after Cyprus has joined the European Community.
Duty Free
Foreigners residing in Cyprus enjoy the benefit of acquiring motor vehicles at duty free prices. These items do not have to be imported from abroad but can be purchased locally. As an example of this substantial benefit, the duty free price of a medium sized saloon car would be half of its price in the UK.
Banking
Cyprus has a high standard banking system which offers a wide range of services. The banking system and methods of management and control are based on the British system. The domestic and foreign banks operating on the island are: Bank of Cyprus, Cyprus Popular Bank, Hellenic Bank, National Bank of Greece, Alfa Bank, Arab Bank and a number of offshore banks. The official currency of Cyprus is the Cyprus Pound (CyP=100 cent)

Opportunities for Investment:
Foreign Direct Investment:

(a) Non - EU Citizens
The Government last years relaxed the rules governing foreign non-EU citizen direct investments in Cyprus. The new regulations allow foreign participation up to 100% and provide a simple administration procedure and straightforward eligibility criteria whereby in most cases applications for inward investment are reviewed by the Central Bank of Cyprus.

The industrial sector, the wholesale and retail trade sector and the services sector are all open to non-resident investors. For the industrial and the wholesale and retail trade sectors, the Central Bank handles applications where foreign participation is below 50%. Where foreign participation exceeds 50%, or the investment is more than CyP750.000, applications are handled jointly by the Central Bank and the Ministry of Commerce, Industry and Tourism. For services, up to 100% foreign participation is allowed and the Central Bank handles the applications. Services have been split into two categories depending on the minimum capital required for each company to be formed. The minimum capital can be either CyP50.000 or CyP100.000.
Investments in tourism are subject to the tourist policy applicable at the time. At present, this policy provides for up to 49% foreign participation in hotels, tourist villages, villas, etc, while 100% participation may be allowed for projects that enrich tourism, such as golf courses, theme parks, marinas etc.
(b) Citizens of EU.
On 7 January 2000 all the maximum allowable percentage of foreign participation as well as minimum levels of foreign investment in any enterprise in Cyprus (described above) were abolished for the citizens of EU member states. This new policy does not touch upon limitations applicable under other laws or regulations (e.g. this liberalization does not apply for the acquisition of immovable property). In addition, the maximum foreign equity participation of 50% in the banking sector remains.



(c) More stimuluses for foreign direct investors
Low Corporation Tax: Net profits are taxed at a rate of 20% for chargeable income up to CyP40,000 and 25% for that in excess of CyP40,000.
Low Income Tax: Expatriates employed in IBCs are charged low rates of income tax.
No Withholding Tax: Dividends paid by resident companies to foreign incorporated companies are exempt from withholding tax. In the case of physical persons, the tax withheld is is credited against their own tax liability
No Capital Gains Tax on profits generated by the sale of shares of companies listed on the Cyprus Stock Exchange (This applies until the end of the year 2001).
10-Year Tax Holiday: Profits resulting from the operation of auxiliary tourist projects such as golf courses, health centers, theme parks etc are exempt from corporation tax for a 10-year period.
Equipment Tax Allowances: There are investment allowances for equipment and machinery used in the manufacturing sector and considerable wear and tear allowances covering both machinery and certain categories of hotel buildings.




Insurance:
Health Insurance
Health care in Cyprus is inexpensive. In every town there are Government hospitals, where fees are very low. However, for those who prefer private treatment there are a number of private clinics with competent specialist physicians in all fields. A doctor's visit costs about CyP10 - CyP20 and X-rays from CyP15. Inexpensive Private Medical Insurance is also available, starting from CyP130 pa.

Property Insurance
Comprehensive insurance cover against fire and associated hazards is provided by Tremetoushiotis Developers Ltd at no cost until the property is delivered. Thereafter, the cost of the insurance will be borne by the purchaser. Our company can give you any assistance you need in this field and arrange for you very low prices for the insurance on your property.